AG2001/8068, Transcript of Proceedings [2002] AIRCTrans 117 (3 January 2002)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER BACON

No AG2001/8068

APPLICATION FOR CERTIFICATION OF AGREEMENT

Application under section 170LK of the Act
by Kilcoy Pastoral Company Limited for certification
of the Kilcoy Pastoral Company Limited Processing
Certified Agreement 2001

BRISBANE

9.33 AM, THURSDAY, 20 DECEMBER 2001

PN1

THE COMMISSIONER: Could I take the appearances, please?

PN2

MR R.E. WOTHERSPOON: Yes, Commissioner, Wotherspoon, initials R.E. and I appear for the National Meat Association of Australia on behalf of Kilcoy Pastoral Company Limited and with me is MR G. JOHNSON.

PN3

THE COMMISSIONER: Very well, thank you, Mr Wotherspoon.

PN4

MR L. NORRIS: May it please the Commission Norris is my name, initial L., Industrial Officer of the Australasian Meat Industry Employees Union. With me today is MR RICHARDSON, initial R., Branch Secretary of the union. Commissioner, we're seeking leave to intervene pursuant to paragraph (a) of sub-section 2 of section 43 of the Act. In support of that application, Commissioner, I would refer the Commission to the fact that the statutory declaration filed on behalf of the employer records the fact this is a section 170LK agreement, that notices were delivered to employees advising them if they wished to have representation from an organisation they could and that the employer was notified that several employees had, in fact, availed themselves of that right.

PN5

And in the circumstances it would be our submission that the Commission would be satisfied that the requirements of paragraph (a) are satisfied and it's proper to grant leave.

PN6

THE COMMISSIONER: You contest any of that, Mr Wotherspoon?

PN7

MR WOTHERSPOON: Commissioner, at this stage we don't object to the intervention but we do reserve our right at some appropriate time if it appears necessary to test, in fact, the right of the union to intervene on the basis of section 43(2), but at this stage we accept, on face value, the information provided to us.

PN8

THE COMMISSIONER: Well, I'm not sure what that means, Mr Wotherspoon. Either they are granted leave or they are not and now is the time to determine that.

PN9

MR WOTHERSPOON: Yes, Commissioner. Well, as I said - indicated initially, no, we don't have an initial objection. That is our position on the face of the information provided.

PN10

THE COMMISSIONER: Very well. Well, in the circumstances that the material is not contested, Mr Norris, the Commission doesn't have a discretion and the Commission must grant leave to intervene pursuant to section 43(2)(a) of the Act. And the Commission now accedes to the will of the Parliament and grants you leave to intervene. Mr Wotherspoon.

PN11

MR WOTHERSPOON: Commissioner, this application is an application under section 170LK Workplace Relations Act for the certification of an agreement between Kilcoy Pastoral Company Limited and its employees in respect of the meat processing operations at its plant at Kilcoy. Commissioner, I have prepared some supporting information which I would seek to tender to the Commission and the parties which simply goes to outline the background to the agreement.

PN12

And it refers to an attachment at the end of that which is a summary of the various provisions of the agreement between the company and its employees and compares those various provisions with the provisions of the Federal Meat Industry Processing Award 2000, which is the relevant award for the purpose of conducting the no disadvantage test. Commissioner, we would suggest to you that that outline or analysis of the agreement will go to show that, in fact, this agreement does pass that no disadvantage test; that on the whole this agreement does provide terms and conditions of employment which are not less than the terms and conditions set out in the relevant award.

PN13

Just to outline the first part of the document, Commissioner, it goes through and explains the immediate history of this agreement. There is an existing certified agreement in place which has passed its nominal expiry date. It goes on to outline a chronology of events which were, in fact, the process of renegotiating an agreement which was initially proposed to be an agreement under section 170LJ which was subsequently rejected by a valid majority of employees at the plant. In response to that - subsequent to that vote a number of employees requested that a proposed agreement be re-submitted for consideration and vote.

PN14

The union was invited to be a party to that agreement and has declined to be so. The proposed agreement at that stage was then submitted to the employees who voted upon it on 14 December, having had the proposed agreement and required notices under section 170LJ for a period of 14 days and that agreement was made by an acceptance of a majority of employees on 14 December. In fact, as the affidavit that's been filed in support of the agreement attaches, indicates the vote to be some 73 per cent of the employees who voted at that ballot.

PN15

Commissioner, the supporting documentation also goes to give a general outline of the comparative award, being the Federal Meat Industry Processing Award and some of the key provisions in that award and then goes on to outline the key features of the agreement. And then the attached document, as I said, is a more detailed comparison of the two documents, the agreement and the award, indicating by category some matters that are merely administrative in nature.

PN16

But I will draw to the attention of the Commission that, in fact, the agreement does have a special termination provision which does allow employees having trialled the operations - having trialled working under the terms of this agreement for a six month period if they so wish to conduct a review of that agreement and if a valid majority so decides the company would then consent to a termination. The other provisions or the other categories in that attachment document set out those provisions which are the same as or consistent with the award provisions.

PN17

It highlights a number of provisions which are, in fact, in excess of the award and then there are a number of provisions which are different to the award. And finally there are a number of provisions in the award which are not contained in the agreement. Most of those are fairly administrative or they are not applicable to the particular operations at Kilcoy. Commissioner, unless there's - just to explain in a little more detail, Commissioner, the agreement itself outlines in clause 11, I think from memory, a payment by results clause.

PN18

Now, that clause in the agreement, except for some consequential changes to tailor it to a particular operation, is identical to a similar provision in the Federal Meat Industry Processing Award. The agreement itself does not contain the incentive system or the payment by result system. The clause is merely a facilitative clause to allow the parties to then agree upon an incentive payment scheme and that facilitative clause contains the same protective devices that the award has in the sense that it can be withdrawn from. A party may bring the matter to the Commission if it's felt that the terms of that incentive scheme are harsh or oppressive.

PN19

But I simply highlight to the Commission that the scheme itself is not part of the agreement being certified or being proposed for certification today. Commissioner, unless there is any specific questions you wish to ask in relation to the effect of the agreement, there is really probably not too much more I can say at this point.

PN20

THE COMMISSIONER: Well, there is one: I note that the agreement in its terms, on a number of occasions, refers to the union, and provides certain rights to the unions, or at least - I don't think it actually defines the union, it just describes it as the union - and given that it is an LK agreement and that this time it appears - and Mr Norris will leap to his feet if I am wrong about this - that the union is not going to be party to the agreement. I am just a bit interested in what those clauses mean and how they are supposed to operate, and what they are supposed to do exactly.

PN21

MR WOTHERSPOON: Commissioner, perhaps I could add then to some of the explanation, that this agreement before you today is in almost identical terms to that which was initially proposed and voted upon and rejected and proposed to be certified under section 170LJ. That was an agreement proposed to be made with the union and the company's employees. There are three, I think, two or three minor differences between the documents, probably the more significant one being the special termination provision, but in all general terms it is in identical terms to the previous agreement.

PN22

Even though the agreement has been proposed to be certified under section 170LK, there has been no attempt to exclude the union, being the AMIEU, from any of these negotiations, proceedings, or indeed, to be party to the agreement. The company therefore has continued to reflect and accepts that there may well be a role for the union to play in terms of representing some of its employees if they so desire. However, the agreement itself is between the company and the employees.

PN23

THE COMMISSIONER: But what does that mean? The employees and the company have agreed certain things, it appears that the union is not to be bound by those arrangements, and my question is there are clauses in the agreement which seem to have work to do that bind, or at least, on their face, seem to bind or in some way confer rights to the union, and it is not a party to the agreement.

PN24

MR WOTHERSPOON: Commissioner, can you point me to a particular provision, and perhaps I could - - -

PN25

THE COMMISSIONER: Well, there is clause 39 which is union officials and right of entry. There is trade union training leave which makes specific reference to the AMIEU, and that is to be found in clause 38. There is another reference in clause 5.12, and that is that if someone is to be suspended the union is to be advised and the union is to do certain things, and the union has certain rights to intervene. Again, there is a reference to the union in 5.17, and there are others.

PN26

MR WOTHERSPOON: Yes.

PN27

THE COMMISSIONER: It is just that the union is not a party to this.

PN28

MR WOTHERSPOON: That is true, Commissioner, as I said, the union was - the document was prepared - - -

PN29

THE COMMISSIONER: I understand the background.

PN30

MR WOTHERSPOON: - - - on the basis that they would be able to be a party to the agreement right up to whenever the last opportunity would be. The right of union officials and right of entry, I believe, does really no more than what the legislation would enable officials of the union to do.

PN31

THE COMMISSIONER: The difference being a Parliament can change that.

PN32

MR WOTHERSPOON: That is true. I think the answer to your specific question is that you are quite right, that the union is not a party, and therefore could not be bound by any of the terms. However, the parties to the agreement have undertaken certain arrangements to the extent to those arrangements can be facilitated by those parties, then the agreement is intended to have that effect.

PN33

THE COMMISSIONER: What I am interested in is what the employer thinks about that. Let me be more specific: is it that the employer intends to afford rights to the union under this agreement, but acknowledges that the union itself is not bound to observe any of the terms of the agreement that it doesn't wish to. I mean, I am happy if that is the situation; I am not trying to be obstructive here. All I am saying is that: is that the employer's understanding at the outset of this?

PN34

I mean, there are High Court decisions in relation to employees and whether or not they are bound, and it seems to me that this falls into that category; that the parties have agreed to afford certain rights, and perhaps obligations on the union. The net effect of what has happened is that the union is entitled to, at least as far as the employer is concerned, the union is entitled to exercise any rights afforded to it under this agreement, but is not bound to comply with any obligations on it created by the agreement.

PN35

MR WOTHERSPOON: Commissioner, that is a position that I believe that the company would need to live with for the duration of the agreement. As you will see in clause 3.2, the parties have agreed that it would be binding upon any organisation of employees who wish to accept, so I simply restate that there is a facilitating provision there for an organisation to bind itself, if it so wished.

PN36

THE COMMISSIONER: Yes. I have read that provision, and I understand the provision in the Act. My point more is is that I don't want this contested some time down the track; that I am happy to proceed on the basis if the employer says, well, we understand those clauses that refer to the union operate in the following ways, and that is where there is a right conferred and the union chooses to exercises that right, we will apply this agreement according to those terms. But we accept - we being the employer - that where there is an obligation created on the union and the union is not party to this agreement, it is not bound to the obligation.

PN37

MR WOTHERSPOON: Yes, Commissioner, the company understands and accepts that that is the position.

PN38

THE COMMISSIONER: Very well, thank you. Thank you, Mr Wotherspoon. Mr Norris?

PN39

MR NORRIS: Yes, thank you, Commissioner. Commissioner, the union has already forwarded correspondence to the Commission foreshadowing an application for the time in which to prepare its case. I wouldn't reiterate what is in that correspondence, but simply rely upon it, and simply seek to add a few further comments in support of the application. Firstly, Commissioner, this is obviously the first time that we have seen this document that has been tendered to the Commission this morning, dealing with both the chronology and the comparison with the award.

PN40

Secondly, Commission, I wish to take a very brief period just to sketch out some of the issues involved, some of the union's case, to apprise the Commission of why it is necessary to have further time. In this statutory declaration that was filed on behalf of the company it is asserted that there are no reductions compared to the award in this agreement. It is asserted at question 6.2: would certification result on balance in a reduction of overall terms and conditions of employment of employees covered by the agreement under relevant or designated awards or laws of the Commonwealth State or Territory? No.

PN41

Then the next question, of course, reads: Please identify by referring to specific clauses in the agreement any reductions in terms and conditions of employees under any relevant or designated award or other law. And the answer is: No reductions, none at all.

PN42

Well, Commissioner, even on a prima facie reading of this agreement, there are some stark reductions under this agreement compared to the relevant award. One of the most stark, Commissioner, and there are a number the union seeks to agitate but one will suffice to illustrate, is essentially the hours of work clause, clause 21 under the agreement, I believe - or perhaps 16, I'm sorry. Well, the hours of work have been expanded to seven days per week. Clause 16.3, that's affected by 16.1. Clause 16.3 provides for a 25 per cent penalty if ordinary hours are rostered on a Saturday.

PN43

16.5 goes on to say that where there's a seven day week cycle you don't receive that penalty for a Saturday. Now, in the document filed this morning or tendered this morning, on page 6 of 7, it speaks of clause 21 of the award, the hours of work clause, and I'll just interpolate to say that the concluding comment at the end of this discussion is the agreement is consistent with this award clause. Well, that is clearly not so.

PN44

THE COMMISSIONER: I'm sorry, where's that?

PN45

MR NORRIS: It's the very last sentence, Commissioner, at the end of the discussions on the award provisions. It states "the agreement is consistent with this award clause". Well, that is starkly not so. As noted in the discussion by the applicant on the award clause, the ordinary hours of work are between Monday to Friday. By agreement, by a majority agreement, or by individual agreement, ordinary hours may be rostered on a Saturday or a Sunday. However, there are penalties applicable for this rostering on a Saturday or a Sunday, 50 per cent in the case of Saturdays and 100 per cent in the case of Sundays.

PN46

Now, the agreement makes no provision for this. It's taken away the employees right to agree to whether or not they're rostered on Saturdays or Sundays. That's a stark difference between the award and one, prima facie at first blush, must cause this Commission some grave concern and particularly would cause some concern about the material that has been filed asserting that there have been no reductions at all, and the assertion that the agreement is consistent with the award clause. Now, that's plainly not so.

PN47

Now, Commissioner, the rates of pay as well - we highlight this just briefly, I might add, as we've just briefly visited the hours of work clause to indicate the issues involved. The rates of pay are contained in table 1 at the agreement. I seek to hand up the document that we've compiled which outlined the current award rates.

PN48

HIS HONOUR: Just better start marking these documents, Mr Norris. I'll mark the document you've just handed up as exhibit AMIEU1, and whilst I'm at it, I will mark the document Mr Wotherspoon handed up as NMA1.

EXHIBIT #AMIEU1 CURRENT AWARD RATES

EXHIBIT #NMA1 SUBMISSIONS RE PROPOSED KILCOY PASTORAL COMPANY LIMITED PROCESSING CERTIFICATE AGREEMENT 2001

PN49

MR NORRIS: Now, Commissioner, if one looks at the minimum rates prescribed in the company table 1 on the bottom table, on the right-hand column which are the incentive minimum payments seven day rotating roster, rates per day 10 hours.

PN50

THE COMMISSIONER: Which page is this on, I'm sorry?

PN51

MR NORRIS: It's table 1 to the agreement, Commissioner. It's actually not paginated so it may require the Commission turning it over.

PN52

THE COMMISSIONER: I now have table 1.

PN53

MR NORRIS: Yes. If one were to examine, Commissioner, the bottom table on the right-hand column which deals with the rates for incentive minimum payments seven days rotating roster with the document that the union has prepared which is the bottom column - the bottom table, I beg your pardon, where we've compiled the daily rates for a 10 hour day in the various levels, the summary effect is that the agreement rates are in conformity with the award rates. However, you can be made to work Saturdays and Sundays with no penalty whereas under the award, these minimum rates are for Monday to Friday work.

PN54

Similarly, and I'm just skipping through the material at this stage, Commissioner, just to apprise the Commission of the case we intend to run, the rates in respect of other categories - - -

PN55

THE COMMISSIONER: Well, just before you do move on, I'm not sure I kept up with you. The rate I'm supposed to look at, is this right, is if you go to table 1 in the agreement - - -

PN56

MR NORRIS: Say, for instance, Commissioner, if you went to the bottom table - - -

PN57

THE COMMISSIONER: Which is - yes.

PN58

MR NORRIS: - - - and look at beef slaughterer class 1 which is level 5.

PN59

THE COMMISSIONER: Right. Yes.

PN60

MR NORRIS: And then kept moving along that line until we get to the column which is indicated "daily hire incentive minimum payments seven day rotating roster".

PN61

THE COMMISSIONER: Yes.

PN62

MR NORRIS: $164.40.

PN63

THE COMMISSIONER: Yes.

PN64

MR NORRIS: If one turns to the document that we've prepared and it's the bottom table, daily rates, 10 hour day, level 5, the very end column, 164.40. So in other words, the minimum rates provided in the agreement are the same as the minimum rates provided by the award; there's no debate about that. However, you can be rostered Saturdays and Sundays under the agreement with no penalty. Now, that's a serious disadvantage and really, one that makes a mockery of the assertions that have been made, just on a prima facie basis.

PN65

Another stark area of disadvantage, in our submission, just on a prima facie reading, Commissioner, one will also see in the company's tables full-time - beg your pardon, daily hire leave. Now, the daily hire leave rate is the same as the minimum rate prescribed by the agreement. So in other words, all forms of paid leave will be paid at the same rate that one gets as the minimum rate under the agreement. Now, that's in direct conflict with the award particularly as under the award in an incentive scheme situation, clause 16.12 of the award, the effect of which is that employees engaged under an incentive scheme - effectively all payments made to them under that scheme within ordinary hours, are taken to be the ordinary time rate once it's tallied and then averaged out.

PN66

So that's - I mean, potentially, employees under an incentive scheme under an award have an ability to get their average earnings that they make under the incentive scheme. Employees under this agreement do not. They get the minimum rate for all forms of paid leave; direct reduction, stark inconsistency. Now, to take the argument a little further, even if one looks at the time work rates of pay, they're similar as once again to the minimum rates in the award. However, you can be made to work Saturdays and Sundays with no penalty. Your right to agree to it or reach agreement with the employer which is provided under the award has been taken away.

PN67

The employer has the right to set the rosters, and your right to a penalty if you do work it has been taken away as well. Now, Commissioner, there are a number of other areas where we assert there are disadvantages in the area of the stand-down clause, the spread of hours has been opened up by one hour; meal allowance provisions; various other sections; shift allowances; sick leave probationary employees and so on, and might I add, which should cause the Commission serious concern, these rates for seven day employees, working 10 hour days which are equivalent to the award minimum rates include payment for public holidays. You don't get any.

PN68

And it's asserted that there's no reductions compared to the award. Now, there's one other issues that we will be seeking to agitate, Commissioner, and it's one that we submit will require very careful consideration by the Commission, and indeed the Commission would be assisted in that process by careful submissions. And it's about whether or not the incentive scheme clause that's proposed to be included in this agreement can in fact be included. I might ask the Commissioner to turn it over, because I intend to speak briefly about it. It's clause 11 in the agreement.

PN69

THE COMMISSIONER: I have it, Mr Norris.

PN70

MR NORRIS: Yes. Commissioner, to paraphrase the effect of the whole clause, it allows the employer to introduce an incentive scheme in writing. Thereafter it can be modified, but that's only by agreement. The decision on what the terms of the incentive scheme are at the introduction are up to the employer. It's not by majority agreement. Only a variation is by majority agreement. Either party has the right to terminate the incentive scheme by giving two months notice. There's a purported provision in there allowing the Commission to terminate it immediately upon certain factors or upon the Commission being satisfied of certain factors, namely, that it's against the Act or inconsistent with the Act or harsh or oppressive.

PN71

Now, my friend submitted that the proposed incentive scheme, which is going to be utilised under this clause, will not be part of the agreement. Well, if one casts one's eye across Clause 11.5, it reads:

PN72

Subject to this clause all wages and other entitlements payable to an employee in accordance with an incentive payment system under this clause shall be payable to the employee as if the terms of the incentive payment system were terms of this agreement.

PN73

Now, whichever way one approaches the construction of that clause, it creates serious problems. If as my friend asserts it doesn't incorporate the incentive scheme as part of the agreement, then the employees are left in a situation of having unregistered agreements, and there's much Federal Court authority - I beg your pardon, Victorian Supreme Court authority to suggest that such agreements aren't enforceable, leaving the employees in a very precarious and seriously disadvantaged situation, in our submission, particularly if it were the case that the employees were to get into a dispute with administrators or liquidators about their entitlements. Or even, indeed, a dispute with their employer about their entitlements.

PN74

So if one looks at it that way, it's a serious problem. If one looks at it the other way, that it does indeed incorporate the terms of the incentive scheme both now and into the future, which is what is allowed by this clause, variation in the future, it creates even more problems, because there's a whole legislative regime under our Act about the certification of agreements and the variation of agreements as well. Now, this clause in summary purports to give the employer the right to seriously affect the operation of the certified agreement, vary the operation of the certified agreement as certified without any reference to the Commission.

PN75

That's a serious inconsistency with Section 170MD, from memory, which deals with the procedure for varying the certified agreement. There are other parts of the clause which are also inconsistent with the Act as well. Subclause 11.2 allows the incentive payment system to deal with specified pieces of the work-force, or sections of it. As the Commission may be well aware, there's a requirement under Section 170LU subsection 8 that a certified agreement can't unfairly divide classes of employees as to who it covers. Yet the employer is granted the right to select sections of the work-force to apply variations to the terms of the certified agreement too; serious problems.

PN76

One only needs to look at subsection 8 of Section 170LK, which says if you vary a certified agreement it must be resubmitted to the work-force before you can certify it. Now, this clause purports to give the employer and unfettered right, subject to agreement with the employees, to keep changing, keep varying and modifying the operation of the certified agreement without reference to the Commission. We've obtained some case law from the Federal Court which supports the proposition that we're putting, and that is for the Commission to delegate it's responsibilities under Section 170MD and it's responsibilities under the Act to approve variations to the parties is impermissible, beyond the jurisdiction of the Commission.

PN77

That's a brief sketch of the issue, Commissioner, and as I submitted at the outset, it's a very important and complicated issue and one that the Commission will obviously need to consider carefully and will need to hear careful submissions about. So I would cease my application to adjourn the matter at this stage on that basis.

PN78

THE COMMISSIONER: Very well. Thank you. Mr Wotherspoon?

PN79

MR WOTHERSPOON: Thank you, Commissioner. I say that the company strenuously opposes any adjournment of these proceedings. We see it as unnecessary and that there's no grounds to do so, which we'll expand upon. Can I just say in general, and I'll also expand on this, that this agreement is pivotal to the continued success of the operation at Kilcoy. Moreover, any delay of it at this point in time is going to be crucial to whether or not the operation in fact is able to get under way again and recommence operations as management, the board and all employees have a great desire to do.

PN80

In the knowledge that the union and my friend here was to make application for an adjournment today, we have in fact prepared a statement, which I will read through and provide a copy of in a moment, but can I just say that in response to some of the matters foreshadowed by Mr Norris, without going through all of them in detail, but some of the major ones, he made reference to the hours of work provisions and the fact that the agreement enables the ordinary hours of work to be spread across seven days of the week. A proper reading of the award will show that in fact the award also allows that to occur by use of the facilitative provision in the award.

PN81

Now, Commissioner, the agreement that is before you today is in effect an implementation of those facilitative provisions. The parties have reached agreement about making certain changes to the way they wish to operate. To that extent it's entirely consistent with the provisions of the award. By way of further example, Mr Norris referred to week-end penalty rates. It is true that the award makes specific reference to week-end penalty rates in the hours clause, but very relevantly the opening words say, "Unless otherwise agreed, the minimum rate to be paid -" The facilitative provisions also make reference to the ability of the parties to reach agreement either with an individual or with a majority of employees to vary those provisions of the award.

PN82

It does not in fact require a certified agreement to do that. The parties have chosen to put their names to a formal document and agree to certain provisions which they think will give them the best chance of some security of employment and continuity of operations and the provisions in the agreement, therefore, are, we strongly submit - are consistent with the award. If the award did not allow for those things, then there might be some basis for complaint, but the award does allow for those things. Can I just make reference to the incentive clause that Mr Norris also had some comment to make about. As I indicated earlier, Commissioner, the provision that's in this agreement, apart from some necessary consequential changes to tailor it to the parties concerned in this instance, and the agreement in which it's contained, it is a direct lift-out from the Federal Meat Industry Processing Award.

PN83

That provision was arbitrated upon by a Full Bench of this Commission. At this point in time there is no agreed incentive scheme arrangements and therefore any proposed - - -

PN84

THE COMMISSIONER: There doesn't need to be an agreed one, does there? 11.1 just says the employer has a discretion to implement one. You don't need agreement.

PN85

MR WOTHERSPOON: That's true, Commissioner. At this stage, and this stage the discretion has not been exercised.

PN86

THE COMMISSIONER: No, but it can be - - -

PN87

MR WOTHERSPOON: But the intention - - -

PN88

THE COMMISSIONER: - - - if the agreement was certified.

PN89

MR WOTHERSPOON: Yes, the intention is that it would be exercised. It's only at that point that that scheme then receives the force and the protection of the certified agreement, and there are provisions there which protect parties to that scheme to take certain actions if they believe that the scheme itself is harsh or oppressive. To that extent, the agreement - the incentive scheme - does have enforcability, under the terms of the agreement. Mr Morris would have us believe that it's sitting out in the ether somewhere, with no level of protection at all. That is not true.

PN90

MR MORRIS: That's what you said. I didn't say it, you said it.

PN91

MR WOTHERSPOON: The provisions - by the same token, the provisions in exercising the terms of the agreement, are not and cannot be, characterised as an attempt to vary the certified agreement. That, also, is a misconstruction of what the agreement is all about. The parties have agreed to certain facilitative provisions. The implementation - - -

PN92

THE COMMISSIONER: How do those facilitative provisions have the no-disadvantage test applied to them?

PN93

MR WOTHERSPOON: Commissioner, the - - -

PN94

THE COMMISSIONER: You surely can't - it surely can't be consistent with the scheme of the statute to have a safety-net award system underpin enterprise bargaining with a requirement that the Commission be satisfied that certain statutory tests are met, and as soon as they are met the employer, and I'm not suggesting this employer intends to do so, but, nevertheless, an agreement is assessed against and the no-disadvantage test is applied. Immediately upon that happening, by the time the parties get to the ground floor, one party to the agreement exercises a right it has under the agreement to implement a different system of payment which, if that were tested, may fail the no-disadvantage test.

PN95

MR WOTHERSPOON: Well, I don't think that can occur, Commissioner. The award provides for an incentive payment scheme which says that the minimum earnings under any incentive scheme arrangements, must be the applicable classification rate plus 20 per cent. This agreement reflects exactly that. So, therefore, it is not possible for any proposed incentive scheme to go below the minimum requirements of the award, because it incorporates the 20 per cent minimum earnings requirement, which is the same as the award.

PN96

THE COMMISSIONER: Is that in Clause 11, is it?

PN97

MR WOTHERSPOON: It's reflected by reference of Clause 11 to the wage rate schedule at the back, and as Mr Norris correctly pointed out in his arithmetic, the figure that he referred to incorporates 20 per cent over the award rate.

PN98

THE COMMISSIONER: Can you walk me through the machinery of that?

PN99

MR WOTHERSPOON: Commissioner, I think the starting point would be the award. Do you have a copy of the award with you?

PN100

THE COMMISSIONER: The award?

PN101

MR WOTHERSPOON: The Federal Meat Industry Processing Award.

PN102

THE COMMISSIONER: Not with me, but - - -

PN103

MR WOTHERSPOON: Well, I'll just make reference to it - my friend has assisted us with a copy. If I can direct you to Clause 16.8.

PN104

THE COMMISSIONER: Right.

PN105

MR WOTHERSPOON: You will see, Commissioner, there that it specifies the minimum earnings that an incentive scheme must provide for - 16.8.1, for daily hire employees:

PN106

...an incentive loading of 20 per cent of the award classification rate and the daily hire loading of 10 per cent.

PN107

Now, it's of assistance then, to refer to the exhibit AMIU1, which Mr Norris provided to you a short while ago, and if we start at the top table which sets out weekly rates, and we're looking at level 5, it starts off in the first column, after the classification column; it shows the minimum time work rate of $460 - $480.60, then the incentive rate for a weekly, which adds the 20 per cent, and the far right column includes the incentive 20 per cent and the daily hire 10 per cent.

PN108

Now, if we drop down to the table below it, headed Daily Rate 7.6 Hour Day, that weekly rate is $124.95, and the bottom table extrapolated out for a ten-hour day becomes $164.40. That's the figure which appears in the table which is Table 1, attached to the agreement.

PN109

THE COMMISSIONER: Right, I understand that, but to secure the position that's obtained by the award, you need a clause in the agreement that says that any payment by results cannot yield an outcome that is less than the relevant rate prescribed by Table 1. And that was the point of my question: is there such a sub-clause in this agreement? Because if there's not, it allows for an outcome that's less than Table 1, does it not?

PN110

MR WOTHERSPOON: That may well be so. I would take advice from that, Commissioner. I just - Commissioner, all I can say is that that certainly was not the intention, and if that is a required rectification then an undertaking can be given - - -

PN111

THE COMMISSIONER: Yes.

PN112

MR WOTHERSPOON: - - - to that extent, that a provision be inserted which maintains that minimum position.

PN113

THE COMMISSIONER: Yes.

PN114

MR WOTHERSPOON: So, Commissioner, I was just making some brief comments on some of the specific issues that Mr Norris raised. I have indicated to you that any delay in this matter has potential for a serious effect upon the operation of this company - or continued operation of the company - and, in fact, the security of employment of the employees.

PN115

THE COMMISSIONER: Can I ask why that is?

PN116

MR WOTHERSPOON: Yes, Commissioner. In fact I will - it's probably appropriate at this stage I hand up to you a statement which I will read through because it does emphasise some important matters.

PN117

MR NORRIS: Well, before it's handed up, Commissioner, I'd like some idea of who it is from and whether they're present and - - -

PN118

MR WOTHERSPOON: It's a submission.

PN119

THE COMMISSIONER: I'll mark the submission as exhibit NME2.

EXHIBIT #NME2 SUBMISSION

PN120

MR WOTHERSPOON: Commissioner, this simply highlights the relevant matters leading up to the events of today. The AMIEU is an intervener in these proceedings. It's not a direct party to the proceedings. It has been offered an opportunity to become a party to the agreement on a number of occasions and was refused on each occasion. One of the principal reasons given to the company by the branch secretary of the AMIEU and this can be tested in evidence is that the AMIEU wants nothing to do with anything connected with clause 16 of the safety net award. This is the payment by results clause which was arbitrated by a Full Bench as I indicated. The AMIEU states in a letter dated 17 December to this Commission that it needs further time to prepare its case.

PN121

The sequence of events listed below and repeated in documents already filed and in documents that will be tendered show the fallacy of this point. The sequence is as follows: the agreement process began on 27 July this year. During the whole of August, September, October, the company on numerous occasions met with the AMIEU to discuss a certified agreement. The position of the company was that it needed a radical new structure and the position of the AMIEU was that it wanted to retain tallies which were the tallies contained in the awards. During the period of September and October, the AMIEU had the company proposal for the certified agreement. This document was in nearly exactly the same terms as the document now proposed for certification.

PN122

On 18 October, the company sought a vote on the proposed 170LJ, as it then was, agreement. On 1 November, the AMIEU held a mass meeting of employees and argued against the agreement. The vote on 2 November rejected the proposed 170LJ agreement. On 5 November, the AMIEU again told the company it wanted a tally type agreement. On or about 22 November the company is informed by a large number of employees that they want the same agreement going to another vote and on 29 November the company gave to every employee a copy of the now proposed 170LK agreement with explanations. This is the agreement the subject of these proceedings.

PN123

It was explained that the company was seeking a 170LK agreement on this occasion and not an agreement with the AMIEU. The company explained that it was seeking a vote on 14 December. The AMIEU Queensland branch was given a set of the same documents on the same day meaning that they had already had this document for three weeks. Both the proposed 170LJ agreement and the proposed 170LK agreement are in nearly exactly the same terms of the purpose of today's proceedings. The above means that the AMIEU has had the proposed company agreement for over three months.

PN124

The agreement has been the subject of countless meetings with the AMIEU, so the AMIEU comes to the Commission asking for an adjournment when they have been involved in the negotiation process in a similar document. They have had a similar document for over three months. They knew that there would be another vote on 14 December. They were given all the documents. They knew there was a likelihood that the vote would approve the document because of the public ground swell. They addressed a meeting of the employees as late as last Thursday in Kilcoy openly opposing the agreement once again. The AMIEU says they intend to run a case concerning the no disadvantage test.

PN125

We'd ask the Commission to consider the following: all through the year 2001 they AMIEU has been involved in the case dealing with the safety net award for Kilcoy that culminated in a decision of the Commission on 12 September and orders were made on 29 October. The AMIEU has known all through 2001 that the safety net for Kilcoy - what the safety net would be having regard to the way the case proceeded in the Commission. At the very least they have certainly known since 12 September during these negotiations. We repeat that the philosophy of the AMIEU is to oppose anything connected to clause 16 of the award.

PN126

They are simply seeking to delay consistent with the AMIEU behaviour commented upon by Deputy President Leary in her decision on 12 September. They cannot be wanting an adjournment to prepare new documents on this matter because it's been in the public domain for months. The AMIEU then says they want an adjournment to prepare matters pertaining to OH and S issues: such matters are nowhere to be seen in the agreement. And there is nothing in the award against the agreement which the agreement is compared dealing with such matters. If such matters are relevant, they are so when the agreement is up and running and operating relevant to the - I would just interpose there, Commissioner, to the actual conduct of or operation of any incentive scheme.

PN127

The company says it wants to have the matter dealt with as a matter of urgency. It is entitled to have it so dealt with and does so for the following reasons: the employees are entitled to know as a matter of urgency whether the agreement is to operate. This is a basic consideration beyond the wishes of the AMIEU. The company needs to know as a matter of urgency the status of the agreement. The company needs to know such facts because of considerations relating to financial backers and potential contractors here and overseas. The Kilcoy community which has substantially pushed the second vote needs to be reassured concerning the status of the agreement.

PN128

The company is entitled to know as a matter of urgency the status of the agreement. Should it open quickly, the company is not standing and doing nothing. It may open very quickly if circumstances dictate that the company finds itself able to trade. Historically, the company has not closed during Christmas as January to June have been good months. The status of the agreement to be ascertained so that the board of directors may be able to make strategic decisions. Any indefinite closure without at least some certainty as to the employment conditions erodes confidence and customer base. Kilcoy has stood staff down and their immediate status depends upon the status of the proposed agreement. These are other people who would not be covered by this proposed agreement.

PN129

Engineering and maintenance projects need to be planned because the plant will be operating differently under this agreement. Tallies will be gone, for example, which affects manning levels. Without knowing immediately the status of the agreement cuts into the planning process, and the company cannot if it opened today meet contracts based on the present agreement. It is totally inflexible and so the AMIEU which is why the company went down the 170LK path. In other words, Commissioner, what we're saying is this agreement is a vital step in the re-opening of the Kilcoy operations. It's a necessary but not sufficient step but unless it takes place, there can be no further steps to be taken.

PN130

Commissioner, we do have statements prepared by the chief executive officer of Kilcoy Pastoral Company which go to the matters which I've just recounted in that brief submission and I'd seek at this point to tender those statements. And can I say also, Commissioner, that at least some of that information is very commercially sensitive and we - if it is to be tendered and questioned today then we'd seek to do so in camera and to - or get some undertaking from the people party to these proceedings that this information would not be released publicly or spoken about to other persons and to maintain the confidentiality of it.

PN131

THE COMMISSIONER: I guess, Mr Wotherspoon, I'm at a little bit of a loss at this stage based on some of the submissions you make, and those submissions go to the contentions of the employer that it's unable to make any decisions, it's unable to plan maintenance and it's unable to do anything until this agreement is certified. I don't understand that. Clearly the employer's view is that the statutory requirements of the Act have been met, and if they are there simply is no discretion afforded to the Commission by the statute. The Commission must certify such an agreement, and I would have thought if the company is so resolute in its view that the statutory tests have or will be met, that it's been a strong position to undertake all of the things it raises now as the reasons to oppose the adjournment.

PN132

It should be in a position to make its planning decisions, etcetera, because the test as far as it's concerned will be met and if it is met then it's mandatory that the agreement be certified.

PN133

MR WOTHERSPOON: Yes, Commissioner. That's is - - -

PN134

THE COMMISSIONER: And if they're not met then it's mandatory that the Commission refuse to certify it or at least afford the opportunity to the parties to allow it through undertakings or other variations to make it certifiable. So at the end of the day an agreement or something close to this document is going to be certified, one assumes.

PN135

MR WOTHERSPOON: That's correct, Commissioner. That in fact is the company's position which we - and that is that we believe that the agreement should be certified and it should be certified today. The submission I've just made goes to strenuous opposition to any delay that you may be thinking about in terms of certification of the agreement, and it's that delay in certification which causes the grave concern and threat to the continued operation at Kilcoy. What is needed for the board and for the financial backers and for potential contractors is to have some level of certainty. If that certainty is not delivered today and the agreement is left in abeyance for some - whatever time it might be, that simply detracts from the proposition that Kilcoy is able to get onto its feet again.

PN136

We say, as we've already indicated, Commissioner, that given the length of time that the union has had access to the document and therefore been in a position to be able to prepare any argument it says about it not meeting the no disadvantage test, which we say would fail anyway, they have had ample time for that. It is not necessary or justified to now extend any period of time and the matter should be dealt with and finalised today.

PN137

THE COMMISSIONER: Very well. Now, do you intend to put into evidence this statement that you have?

PN138

MR WOTHERSPOON: Well, Commissioner, we'd be guided by you. It's there to support the submission we made. Now, we're in a position to put that into evidence today at this moment.

PN139

THE COMMISSIONER: Well, that's your call to make. Perhaps before you make a decision on that we might hear from Mr Norris and see what he's got to say about all that.

PN140

MR NORRIS: Yes. Thank you, Commissioner. As regards the AMIU having what was alleged through the submissions in excess of three months, it must be remembered that the only time that we've been made aware that the company was proposing a 170LK agreement was 29 November. Prior to that point in time it was a very different kettle of fish. Obviously if one is involved in an LJ agreement there's no opposition on the no disadvantage test, unless one wants to oppose one's own case.

PN141

THE COMMISSIONER: Well, the obligations on the parties are the same, and that's to ensure that it meets the no disadvantage test.

PN142

MR NORRIS: Yes, but in the circumstances one would be more ready to visit that if one were dealing with a 170LK agreement that wasn't supported.

PN143

THE COMMISSIONER: Okay. Well, let's get that behind us, Mr Norris. You've had this from about 29 November.

PN144

MR WOTHERSPOON: November. And it's alleged that we're to anticipate the success or otherwise of the ballot. That's a very large submission, with all due respect. It seems to suggest that there's an obligation on parties before these Tribunals to start preparing their cases before they really need to do so. It's a very large submission, with the greatest of respect. We've only had notice since last Friday that the agreement was purportedly approved by employees and notice indeed as of Tuesday, if my recollection is correct, that the hearing was on. That's simply not enough time to prepare, with all due respect.

PN145

And really we'd just refresh our - in our letter applying to the Commission for an adjournment initially, much of what's being put now is inconsistent with the public statements that have been made by the same representatives of the company. It's not just whether or not they've got an agreement in place. There's a range of other factors. Factors that just haven't changed. The other point of course is that we're not seeking any lengthy delay, Commissioner. Subject to the Commission's timetable, of course, we'd only anticipate requiring about a week in which to prepare our case.

PN146

Now, of course, circumstances are overtaking us with the time of year, but given what we're asking, a delay of just a week in the circumstances, compared to the very serious duty imposed on the Commissioner as regards the no disadvantage test and the serious concerns that we've raised at a prima facie level, both with the no disadvantage test and with whether or not indeed Clause 11 can be included in a certified agreement, the Commission must, in our submission surely balance all that in favour of an adjournment that's sought. I can't take the matter any further, Commissioner, unless I can assist the Commission by answering any questions.

PN147

THE COMMISSIONER: What do you say about these statements?

PN148

MR NORRIS: Well, we've had no notice of it, Commissioner. We've had no opportunity to scrutinise what's being alleged and so on. That's about all I can say, and really they must be given very minimal weight, given the public statements that are already on the record and given that the company has admittedly stated on a number of occasions there's a range of circumstances that are going to affect re reopening of this plant or otherwise. The viability of markets, the availability of stock and the price of stock and so on. Now, those circumstances just haven't changed. With respect, the Commissioner, in our submission, would be entitled to be a bit guarded about what's really being sought to be done here today. We've got statutory declarations asserting that there are no reductions at all throughout the agreement, yet even on a prima facie level, one can identify many.

PN149

We've got documents that are lobbed in here on the Commission today which we've had no opportunity to scrutinise and respond to. Realistically with all due respect it's an attempt to try and get this agreement through without due process and scrutiny, with all due respect. I can't take the matter any further than that, Commissioner.

PN150

THE COMMISSIONER: Very well. Thank you. Mr Wotherspoon, are the people or person who have made these statements available for cross-examination?

PN151

MR WOTHERSPOON: The statements to which I have just referred?

PN152

THE COMMISSIONER: Yes.

PN153

MR WOTHERSPOON: They are, Commissioner. However, in consideration of where we currently are on this matter, our position is that we believe there is sufficient material before you now on which to be able to make a judgment together with undertakings given that this agreement does in fact pass the no disadvantage test. I simply rely on the submissions I've made at this stage of how crucial it is to the company to not delay this matter. With respect to Mr Norris' comments, with due respect to him, he is more than capable of making an assessment of that document, the same as what I have done, without needing the information that I've prepared and delivered today. He is more than capable of making his own assessment and should have been in a position to be able to attend to that today if that in fact is what he wishes to do.

PN154

I simply say, Commissioner, that we believe that sufficient has been put to enable a judgment to be made and, in fact, that judgment is that the document does pass the no disadvantage test. And just to add, Commissioner, the statements - if there is to be any adjournment, which I indicate again we certainly oppose, then those statements may well have to be expanded to incorporate some additional material. So at this stage we would leave the position as it currently is.

PN155

THE COMMISSIONER: Very well. I will take a short adjournment and will resume in approximately 10 minutes.

SHORT ADJOURNMENT [10.47am]

RESUMED [11.13am]

PN156

THE COMMISSIONER: I've considered the submissions that have been made in support and against the application by the AMIEU for an adjournment. On the one hand I find the submissions of the employer quite compelling. I do believe that there is significant weight to be attached to a number of the issues raised in the employer's submission. On the other hand I note that there has been only two days notice given of these proceedings and in considering the competing interests of both sides I've determined that an adjournment will be granted.

PN157

But that, because of the fact that the union has had this material in its current form since November - 29 November, I think, or the 28th, and further that at the very latest date against which any measure should be made, Mr Norris concedes is last, I think, Friday, when a valid majority supported or approved this agreement, the union was in a position to know, if not at least strongly apprehend, that an application for certification would be made in the near future.

PN158

The union, it appears, was of the view that the agreement didn't meet the no disadvantage test and was in a position from that point forward to prepare its submissions. Given all that I have determined that the Commission will adjourn today. It will resume tomorrow at 9.45. The union will have the intervening period of time in which to prepare its case. I require that the union prepare a written outline of contentions, and that is that I don't want full written submissions simply dot point contentions, where the union believes the agreement fails to no disadvantage test.

PN159

And I require that written material be faxed to the Commission and to Mr Wotherspoon's office by no later than 8.15 tomorrow morning. As I've indicated the Commission will resume at 9.45 tomorrow, at which time the union will put its submissions and the employer will respond and the Commission will then determine what, after that, it needs to do in relation to this matter. Does anyone have any questions about any of that?

PN160

MR WOTHERSPOON: No, Commissioner, not from my point of view.

PN161

THE COMMISSIONER: Mr Norris?

PN162

MR NORRIS: No, Commissioner.

PN163

THE COMMISSIONER: Very well. The Commission will adjourn until 9.45 tomorrow morning.

ADJOURNED UNTIL FRIDAY, 21 DECEMBER 2001 [11.17am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #AMIEU1 CURRENT AWARD RATES PN49
EXHIBIT #NMA1 SUBMISSIONS RE PROPOSED KILCOY PASTORAL COMPANY LIMITED PROCESSING CERTIFICATE AGREEMENT 2001 PN49
EXHIBIT #NME2 SUBMISSION PN120